Pollock, Rufus (2006): Cumulative Innovation, Sampling and the Hold-Up Problem.
Download (297kB) | Preview
With cumulative innovation and imperfect information about the value of innovations, intellectual property rights can result in hold-up and therefore it may be better not to have them. Extending the basic cumulative innovation model to include `sampling' by second-stage firms, we find that the lower the cost of sampling, or the larger the differential between high and low value second-stage innovations, the more likely it is that a regime without intellectual property rights will be preferable. Thus, technological change which reduces the cost of encountering and trialling new `ideas' implies a reduction in the socially optimal level of rights such as patent and copyright.
|Item Type:||MPRA Paper|
|Original Title:||Cumulative Innovation, Sampling and the Hold-Up Problem|
|Keywords:||Cumulative Innovation; Hold-Up; Sampling; Intellectual Property|
|Subjects:||L - Industrial Organization > L5 - Regulation and Industrial Policy
O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights
K - Law and Economics > K3 - Other Substantive Areas of Law
|Depositing User:||Rufus Pollock|
|Date Deposited:||24. Sep 2007|
|Last Modified:||25. Feb 2015 01:29|
James Bessen. Hold-up and patent licensing of cumulative innovations with private infor- mation. Economics Letters, 82(3):321–326, 2004. James Bessen and Eric Maskin. Sequential innovation, patents, and innovation. Na jEcon Working Paper Reviews 321307000000000021, www.na jecon.org, May 2006. Howard F Chang. Patent scope, antitrust policy, and cumulative innovation. The RAND Journal of Economics, 26(1):34–57, 1995. ISSN 07416261. Iain Cockburn. Blurred boundaries: Tensions between open scientific resources and com- mercial exploitation of knowledge in biomedical research, 2005. Victor Denicolo. Two-stage patent races and patent policy. Rand Journal of Economics, 31:488–501, 2000. R. Eisenberg and M. Heller. Can patents deter innovation? the anticommons in biomedical research. Science, 280(5364):690–701, 5 1998. Nancy Gallini. Patent policy and costly imitation. Rand Journal of Economics, 23(1): 52–63, 1992. Jerry Green and Suzanne Scotchmer. On the division of profit between sequential inno- vators. Rand Journal of Economics, 26(1):20–33, 1995. Bronwyn Hall and Rosemarie Ziedonis. The patent paradox revisited: an empirical study of patenting in the u.s. semiconductor industry, 1979-1995. Rand Journal of Economics, 32(1):101–128, 2001. Carmen Matutues, Pierre Regibeau, and Katharine Rockett. Optimal patent design and the diffusion of innovations. Rand Journal of Economics, 27(1):60–83, 1996. Peter Menell and Suzanne Scotchmer. Intellectual property, 6 2005. forthcoming, Hand- book of Law and Economics. Mitch Polinsky and Steven Shavell, eds. Amsterdam: Elsevier. Ted O’Donoghue, Suzanne Scotchmer, and Jacques Thisse. Patent breadth, patent life, and the pace of technological improvement. Journal of Economics and Management Strategy, 7:1–32, 1998. Suzanne Scotchmer. Protecting early innovators: Should second-generation products be patentable? The RAND Journal of Economics, 27(2):322–331, 1996. ISSN 07416261.